Coinbase Integrates Lightning Network for Faster Bitcoin Payments
Crypto giant Coinbase has rolled out Lightning Network support in collaboration with LightSpark to improve Bitcoin transactions for its customers.
The integration will enable users of Coinbase to make cheaper and faster transactions directly from their Coinbase accounts.
Up to this point, Bitcoin transactions on Coinbase were processed on-chain, which means that the transactions would take at least 10 minutes to settle, with fees varying depending on how congested the network is.
Commenting on the integration, Coinbase’s protocol specialist and Lightning integration lead Viktor Bunin said:
“Growing Bitcoin adoption increases economic freedom in the world. I’m thrilled that our Lightning integration is live to make Bitcoin more useful and accessible worldwide,” he said. “Offering faster and cheaper BTC payments through our partnership with Lightspark is another huge milestone for the ecosystem,” he added.
With the Lightning network, Coinbase users can now enjoy Bitcoin transaction fees as low as one Satoshi, which is the smallest unit of Bitcoin. For now, users will only be able to withdraw a maximum of $2,000, which will cost like $2, which is much cheaper than on-chain Bitcoin transactions.
According to Bunin, the low transaction limit was set initially because higher limits can put a strain on the network and reduce success rate as well as increase fees. However, the limit will increase over time with more liquidity on the network.
“A conservative limit was selected because although Lightning can support arbitrarily large BTC sends, the average success rate of payments declines as the size of the payment increases,” Bunin said. “Setting a lower limit at launch will improve our users’ experience and can be adjusted based on user feedback and as liquidity on the network increases,” he added.
No Lightning in Coinbase Wallet
As Lightning Network is being integrated with Coinbase exchange, some people may be wondering if the service will also be available on the Coinbase wallet. Responding to this, Bunin said there are no current plans to integrate the Bitcoin Layer 2 network with Coinbase’s web3 wallet or any other service for now.
The company however remains open depending on the reception by customers of the current integration which will determine if there is need to integrate with the wallet on Coinbase’s payment platform, Coinbase Commerce.
He also added that the adoption of Layer 2 networks by other ecosystems such as Ethereum has been very impressive, which inspired the company to do the same even though it doesn’t know how it’ll work out for now.
About Lightning Network
Lightning Network is a Layer 2 network for Bitcoin. It was created as an alternative for Bitcoin transactions without using the main blockchain which can be congested and so costly.
More people have been using it over the years with thousands of BTCs spent on it and with Coinbase integration, the adoption is growing wider.
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